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TC Lawns
07-17-2009, 07:34 AM
I currently have a commercial lawn care business that has been in business for 9 years and has 3 full time employees. We have many commercial and residential accounts and have plenty of work for the 3 guys I have cutting every day. We also do landscaping, anything from mulching a customers yard, to new contruction landscaping and renovation. I have always considered the landscaping jobs as "on the side work" since jobs come and go. The lawn maintenance side takes up most of our day to day operations. I have been running commercial mowers and lawn equipment for 9 years, and have recently brought my brother on as a supervisor with our cutting crew. As many of yall know, you can get a little burned out cutting grass every day. I really enjoy bidding on landscaping jobs, putting projects together, running equipment, and you get alot of satisfaction out of your finished product. And plus landscaping is where the money is at. I want to expand the landscaping side of my business so that I am doing that on a more day-to-day basis and let me brother run the lawn maintenance side. I dont have trouble finding landscaping jobs, its just that when we get a big one (sod or renovation job) my costs are high because it cuts into my cutting schedule and we rent most of our equipment. (skid steers, trenchers). I need some advise on which direction to step in terms of purchasing equipment (trucks, skidsteers...or just continue to rent). I see that my expenses are high because I am renting, but dont have alot of money to currently put up for a new piece of equipment. I also like doing site prep and dirt work. I would like to incorporate this into my business as well. I know that some jobs would require renting larger equipment but I am pretty good at getting jobs, bidding, and doing just about any type of site work.

I really enjoy doing landscaping and would like to increase the percentage of jobs that we currently have. Any advise on searching for jobs? Renting vs buying. And what piece of equipment should I start out with (dingo, bobcat)

Thanks in advance for the advise.

fl-landscapes
07-17-2009, 09:19 AM
if you want to move towards the install side more I would say finance a used skid steer or track steer or even a mini like the toro dingo.

White Gardens
07-17-2009, 09:29 AM
if you want to move towards the install side more I would say finance a used skid steer or track steer or even a mini like the toro dingo.

Bingo.

That last three years I've been seeing how my landscaping biz was going to settle, and what equipment I was going to need to buy. I thought about tillers, bed edgers, etc.....

I've come to the conclusion that a mini would be the best investment and I am currently in the market for one. A mini will get into tight places and eliminate a lot of the manual labor involved.

Otherwise, I really haven't found a reason to make any other purchases.

Thebottomline
07-19-2009, 07:57 PM
As far as finding work goes, do you advertise?

I think a mini will probably be an invaluable tool for you. My company has a Dingo and a Takuechi track loader. Needless to say the dingo gets used EVERY day and the track loader once per week.

And do yourself a favor and DO NOT finance it. If you have to finance the machine, you cannot afford the machine.

esnipe8
07-19-2009, 09:28 PM
As far as finding work goes, do you advertise?

I think a mini will probably be an invaluable tool for you. My company has a Dingo and a Takuechi track loader. Needless to say the dingo gets used EVERY day and the track loader once per week.

And do yourself a favor and DO NOT finance it. If you have to finance the machine, you cannot afford the machine.

I would disagree with that last part. If you have good credit, you can finance a new piece of equipment at 0%.
We have gone both ways. Bought equipment cash (2-mt-52s, 1-463), and have financed 3 skids, and trucks (all paid for now, accept 1-F350).

I have come to the conclusion that sometimes it is better to not blow all your cash reserve, and take the free money, 0% financing.

Of course every situation is different, and only you know if you will have enough work to support a purchase.
IMO.

Thebottomline
07-19-2009, 09:57 PM
I would disagree with that last part. If you have good credit, you can finance a new piece of equipment at 0%.
We have gone both ways. Bought equipment cash (2-mt-52s, 1-463), and have financed 3 skids, and trucks (all paid for now, accept 1-F350).

I have come to the conclusion that sometimes it is better to not blow all your cash reserve, and take the free money, 0% financing.

Of course every situation is different, and only you know if you will have enough work to support a purchase.
IMO.

With the economy volatile, financing seems foolish. Either you can afford it, or you can not.

lifetree
07-19-2009, 10:40 PM
With the economy volatile, financing seems foolish. Either you can afford it, or you can not.

I have to disagree ... even in the current economic environment there are business situations which indicate may be the better alternative ... it just depends on the business situation for that particular company !!

Thebottomline
07-19-2009, 10:48 PM
By "business situation", do you mean "broke?" If you are running a good business, there is no reason to finance. Don't believe me? Go read ETWs thread.

Stillwater
07-20-2009, 02:22 AM
[QUOTE=Thebottomline;3100377]And do yourself a favor and DO NOT finance it. If you have to finance the machine, you cannot afford the machine./QUOTE]

Yes debt is very bad, but this is a declarative statement and certainly not true in some instances as anyone with a 1/2 decent knowledge of business would know.

TC Lawns
07-20-2009, 05:52 AM
thanks for the advice guys, I was moving more towards the dingo as well. It would see more work than a skid steer just because how versitile it is and is not overkill for the smaller jobs. I am looking to pick up a used one pretty soon.

As for the "financial" argument above. I see both sides, if you have to finance something, you need to make sure you can afford it, but if you have the cash, pay cash. My situation is....I have the demand to a new piece of equipment, i have plenty of work, and I could probably pay cash for just about anything used that I need. But i like to keep a good amount of cash in reserve to pay employees, fix equipment when it breaks down, pay for landscaping materials, and keep me going when a large group of customers are late on payments. I think if you have good enough credit to get 0% for a year, then purchase something and pay it of before the 0% is up, no brainer. That way you dont blow your reserves. And you have to start somewhere, not everyone who gets into the landscaping business has tons of cash upfront to purchase all the equipment they will ever need.

Thebottomline
07-20-2009, 06:32 AM
[QUOTE=Thebottomline;3100377]And do yourself a favor and DO NOT finance it. If you have to finance the machine, you cannot afford the machine./QUOTE]

Yes debt is very bad, but this is a declarative statement and certainly not true in some instances as anyone with a 1/2 decent knowledge of business would know.


To each his own, if you have to finance 10-20k... you aren't doing so well in this business.

esnipe8
07-20-2009, 11:16 PM
[QUOTE=Stillwater;3100929]


To each his own, if you have to finance 10-20k... you aren't doing so well in this business.

The more you say that the more foolish you sound. How can you make a blanket statement like that without knowing anyone's personal situation?

Most people have to borrow money to start a business, in any industry, that is common knowledge.

My opinion.

AGLA
07-21-2009, 07:57 AM
One of you is saying that you should grow into your equipment and the other is saying that you should equip yourself based on what you currently have.

The question is whether or not you can reasonably expect to grow into your equipment in a shrinking economy. This was pretty easy just a couple of years ago, but definitely a cause for concern at this time.

Less building, less transfer of real estate ownership, loss of home equity (and loans that go with it), more building contractors finishing the landscape, more out of work guys doing landscape work, more people doing side work, and about a hundred other reasons point to the fact that it is much harder to grow out of your debt than it was even just a year or two ago. ..... not impossible, but definitely harder.

Stillwater
07-21-2009, 09:52 AM
esnipe8 in your post #12 that is not my quote i did not say that.

esnipe8
07-21-2009, 03:29 PM
One of you is saying that you should grow into your equipment and the other is saying that you should equip yourself based on what you currently have.

The question is whether or not you can reasonably expect to grow into your equipment in a shrinking economy. This was pretty easy just a couple of years ago, but definitely a cause for concern at this time.


Less building, less transfer of real estate ownership, loss of home equity (and loans that go with it), more building contractors finishing the landscape, more out of work guys doing landscape work, more people doing side work, and about a hundred other reasons point to the fact that it is much harder to grow out of your debt than it was even just a year or two ago. ..... not impossible, but definitely harder.

I dont want to continue to kick a dead horse. I can see both sides of the argument. I still disagree that if you fiance you are running your business poorly. I just landed a 200 home development (8-10 a month) that might justify Financing a new bobcat. I will be getting paid for 8-10 houses a month, so I might be paying for a new machine over said period of time.

esnipe8 in your post #12 that is not my quote i did not say that.

Stillwater, I apologize that was not directed at you, only at the previously stated comments I believe to be foolish. :waving:

Stillwater
07-21-2009, 04:45 PM
no prob, esnipe8 it happends.....

AGLA
07-21-2009, 07:38 PM
I would not count on 8-10 houses getting sold a month in this economy. It is harder to rely on projects continuing. It is beyond our control whether we have contracts or not. That is all that I'm saying.

According to Yahoo Real Estate, Clovis, CA has 293 houses for sale, 1,062 in foreclosure auction, and has had a 16% drop in home values in the last year. AOL Real Estate has a 17.5% depreciation in the last year, 856 houses for sale, and 1,212 foreclosures for sale. I would not extend myself based on continuing to landscape new houses in that market, but that is just me. People get rich on taking risks. That could have a lot to do with me not being rich.

JimLewis
07-22-2009, 02:09 AM
I think financing anything in this economy is a bad move. Personally, I don't like to buy things on credit anyway. I own all 9 of our company trucks outright. They are not all new trucks. Most of them are mid to late 1990s trucks. But I own them all outright. In addition, I own my personal truck as well as my wife's 2005 SUV. I own all of the small equipment we use on a daily basis too.

As for big equipment, I am a big believer in renting. My personal opinion is; if it's something we use daily, I should be able to afford to just purchase it outright (because it should be making me lots of money!) If it's not something I use daily, then it's probably something I should be renting.

We do some pretty good sized jobs. But regardless, we're not doing enough big jobs that we need the larger equipment every day. So I just build the rental fee into our pricing when we do jobs. The customer ends up bearing the cost of the rental, not me.

For instance, let's say we're going to do a rock wall where it would save us a lot of time to use a Dingo (or my preference; Bobcat MT55) vs. hauling the rock into the customer's back yard via wheelbarrow. I could bid the job like this;

20 tons basalt wall rock; $2500
10 yards gravel backfill; $500
100 ft. 3" drain pipe $150
120 man hours @ 55 $6600
_______________________
TOTAL PROJECT: $9750

OR I could bid the project like this;

20 tons basalt wall rock; $2500
10 yards gravel backfill; $500
100 ft. 3" drain pipe $150
80 man hours @ 55 $4400
4Day Rent Bobcat; $1000
_______________________
TOTAL PROJECT: $8550

Now, I may not show the client the rental part of that bid. I might just work the $1000 rental cost into my labor and call the labor $5500. But the point is; the rental is worked into the overall cost of the project. And if you are renting big equipment, it SHOULD be saving you at least in much in labor as it's costing you to rent.

(And before anyone starts getting critical about the above bids, the prices I quoted, what I forgot to factor in, etc. THIS IS AN EXAMPLE FOLKS. It's not a real bid. Chill out.)

The nice thing about renting is they store it when you are not using it, they fix it when something breaks, they provide all the maintenance, they replace the tracks when they are worn out, they keep all the parts for it in stock, etc. Why would I want to have a payment every month of the year PLUS bear all of the maintenance and storage costs every month when I may only use the equipment for a few months out of the year?

Now it may work out better in some climates where you guys are able to do construction 12 months out of the year. But up here, that doesn't really happen. And all the companies who DID finance new trucks and big equipment a few years ago are now all filing bankruptcy this year. I kid you not. The second biggest landscaping company in our state just filed Chapter 11. And one of the top 5 or 10 in Portland just filed Chapter 11 too. I could name 5 good sized companies in my area who filed for bankruptcy protection this year. Financing big new trucks and equipment is all great as long as you have a constant source of big jobs coming in. But when that constant source starts to become more like a trickle, all of a sudden you're hurting big time.

Play it smart. Rent until you can afford to buy.

Stillwater
07-22-2009, 03:53 AM
Jim That was a totaly reasonable post......

When you start seeing posters start picking it apart Just ignore them defense by further explanation is not even worth it you covered both sides.

esnipe8
07-22-2009, 09:47 PM
I would not count on 8-10 houses getting sold a month in this economy. It is harder to rely on projects continuing. It is beyond our control whether we have contracts or not. That is all that I'm saying.

According to Yahoo Real Estate, Clovis, CA has 293 houses for sale, 1,062 in foreclosure auction, and has had a 16% drop in home values in the last year. AOL Real Estate has a 17.5% depreciation in the last year, 856 houses for sale, and 1,212 foreclosures for sale. I would not extend myself based on continuing to landscape new houses in that market, but that is just me. People get rich on taking risks. That could have a lot to do with me not being rich.

With that said, our sister city Fresno has a population of almost 600,000. Zoom out a little more and there is almost or over 1 million in Fresno county. We are the 5th largest city in the most populous state in America. There is work here. It is very competitive, but its here.

90% of our work is new home construction, and has been for almost 18 years. This past two years have been strange. One builder cut their output in half. So I perused another reputable builder and brought us back up to previous levels. We are blessed beyond all means to not be down, or struggling during this horrible recession.

Thats the last two cents I have!!

Turf Logic
07-23-2009, 09:45 AM
[QUOTE=Stillwater;3100929]


To each his own, if you have to finance 10-20k... you aren't doing so well in this business.

This may be the dumbest thing Ive ever heard.

Stillwater
07-23-2009, 10:09 AM
[QUOTE=Thebottomline;3100963]

This may be the dumbest thing Ive ever heard.

Ya I know....
do me a favor and cruise up to the actual post and you will see that I did not post that quote, I am not happy about my name being connected to that BS. I wish the mod would delete that for me.

Stillwater
07-23-2009, 10:10 AM
whos the moderator on this thred?

pjonesco
07-26-2009, 12:33 AM
With that said, our sister city Fresno has a population of almost 600,000. Zoom out a little more and there is almost or over 1 million in Fresno county. We are the 5th largest city in the most populous state in America. There is work here. It is very competitive, but its here.

90% of our work is new home construction, and has been for almost 18 years. This past two years have been strange. One builder cut their output in half. So I perused another reputable builder and brought us back up to previous levels. We are blessed beyond all means to not be down, or struggling during this horrible recession.

Thats the last two cents I have!!

Let me get this straight. You can't pay cash for a bobcat and you have been doing this for 18 years?

AND you are going to base financing a bobcat on the current housing market?

pjonesco
07-26-2009, 12:45 AM
I think financing anything in this economy is a bad move. Personally, I don't like to buy things on credit anyway. I own all 9 of our company trucks outright. They are not all new trucks. Most of them are mid to late 1990s trucks. But I own them all outright. In addition, I own my personal truck as well as my wife's 2005 SUV. I own all of the small equipment we use on a daily basis too.

As for big equipment, I am a big believer in renting. My personal opinion is; if it's something we use daily, I should be able to afford to just purchase it outright (because it should be making me lots of money!) If it's not something I use daily, then it's probably something I should be renting.

We do some pretty good sized jobs. But regardless, we're not doing enough big jobs that we need the larger equipment every day. So I just build the rental fee into our pricing when we do jobs. The customer ends up bearing the cost of the rental, not me.

For instance, let's say we're going to do a rock wall where it would save us a lot of time to use a Dingo (or my preference; Bobcat MT55) vs. hauling the rock into the customer's back yard via wheelbarrow. I could bid the job like this;

20 tons basalt wall rock; $2500
10 yards gravel backfill; $500
100 ft. 3" drain pipe $150
120 man hours @ 55 $6600
_______________________
TOTAL PROJECT: $9750

OR I could bid the project like this;

20 tons basalt wall rock; $2500
10 yards gravel backfill; $500
100 ft. 3" drain pipe $150
80 man hours @ 55 $4400
4Day Rent Bobcat; $1000
_______________________
TOTAL PROJECT: $8550

Now, I may not show the client the rental part of that bid. I might just work the $1000 rental cost into my labor and call the labor $5500. But the point is; the rental is worked into the overall cost of the project. And if you are renting big equipment, it SHOULD be saving you at least in much in labor as it's costing you to rent.

(And before anyone starts getting critical about the above bids, the prices I quoted, what I forgot to factor in, etc. THIS IS AN EXAMPLE FOLKS. It's not a real bid. Chill out.)

The nice thing about renting is they store it when you are not using it, they fix it when something breaks, they provide all the maintenance, they replace the tracks when they are worn out, they keep all the parts for it in stock, etc. Why would I want to have a payment every month of the year PLUS bear all of the maintenance and storage costs every month when I may only use the equipment for a few months out of the year?

Now it may work out better in some climates where you guys are able to do construction 12 months out of the year. But up here, that doesn't really happen. And all the companies who DID finance new trucks and big equipment a few years ago are now all filing bankruptcy this year. I kid you not. The second biggest landscaping company in our state just filed Chapter 11. And one of the top 5 or 10 in Portland just filed Chapter 11 too. I could name 5 good sized companies in my area who filed for bankruptcy protection this year. Financing big new trucks and equipment is all great as long as you have a constant source of big jobs coming in. But when that constant source starts to become more like a trickle, all of a sudden you're hurting big time.

Play it smart. Rent until you can afford to buy.

I just don't understand why people don't try to model their business on this forum like yours. I don't think people understand trucks, shops, and equipment are merely instruments to building wealth.

I don't think people understand how FEW business's are actually successful. I encourage people to talk to their suppliers and find out the truly successful business's. I am pretty close to the local JDL manager, and I could not BELIEVE how many large companies with nice shiny trucks, equipment, shops cannot simply pay for their materials. And with some of these companies, the unpaid bills are in the tens of thousands of dollars. Financing is a rocky road, I understand you may have to finance to start a business, but so many use it as a crutch to grow instead of properly managing their finances and growing slower and more carefully to avoid catastrophe.

In this economy, where the light at the end of the tunnel is growing dimmer every day... why put yourself in a position that will increase your overhead?

Rivervalleylawns
09-09-2009, 12:24 AM
I read halfway through the responses and gave up. But I will honestly tell you man landscaping is where its at. Obviously you are instantly hit with wether or not to buy or rent a tractor/skid. Renting is expensive, but dropping 20 grand hits ya in the bawls... That is your call, either way you still make way more money than mowing. Figure in a 3 man crew on mowing and a 3 man crew on landscaping and tell me which one brings in a bigger gross. For me personally, I really enjoy the landscaping aspect because the instant gratifcation is amazing. It all comes down to doing what you like, so only really you can determine whats best for yourself.

Central Island Lawn
11-09-2009, 01:19 PM
I'm in the same boat. I want to expand my business and I'm looking at buying a used Dingo with attachments, but I'm going to look in to the market a little more and do some research. I could probably rent a mini track unit, but I can only get the bucket with it, the local rental shop won't rent out a trencher or auger because of the cost to maintain the equipment. If I want to trench I need to rent a Vermeer RT100 or do it by hand, which is kind of azs considering all the rocks in the soil here. I am considering financing with a sizable down payment if it looks like I can get some use out of it every week. If I talk to some other local guys that I work with, perhaps I can subcontract the machine out until I get enough business on my own to make it work while.

Mike Fronczak
11-23-2009, 02:22 PM
I'll stick my two cents in on the financing vs. buying thing. I use financing alot. Do I have stuff thats bought & paid for, yes, (of 6 trucks I owe 7K on 1, all trailer are paid, of 6 commercial mowers I owe 3K on 1, dingo & 2 Bobcats are paid, I owe about 65 on the loader) Do I buy stuff used in cash yep. Some things it doesn't make sence (0% or 1.41 % on a wheelloader loan) to pay cash for or its simply to much money to come up with out of pocket (100K for a wheelloader). If it is the same or cheaper to buy (finance) than to rent for the 6 months a year I need it I buy & finance. Yo need to look at a debt to asset ratio not just debt. Why not use somone elses money to make money. Would I go out & buy a complete company worth the stuff & finance it, in this economy, NO WAY IN HELL. It all depends on your situation.